If you have done your homework, you already have a good list of at least five business ideas and have select the business model you want to run. Your next step now is to perform market research to define which business ideas is realizable by analyzing your potential customers and competitors similarly. If you haven't did so already, I strongly suggest you go through the previous articles first, starting from here before proceeding with this one.
As discussed in our previous articles, a profitable niche selection process is usually start with your areas of interest, something that you have knowledge and are passionate or want to learn about. Finding a small business start up idea, small home business idea or home idea internet opportunity is the foundation of a profitable home business that will create your reaches and last for years to come. All the needed steps are well shown, you just need to follow the research process. There's some work to be done, but hey, you are building a business for the long haul!
What is Market Research?
Market research is a scientific process for collecting and analyzing information and data about potential customers and competitors. Its uses include to help finding a group of people based on variables like age, gender, location, income level, etc… that share a need and have willingness and ability to pay for the solution. Market research can be used also to evaluate competitors’ strengths and weakness to determine what your significant success factors are to position your home business in the market correctly.
Conducting proper market research before entering the market is the key to developing an appropriate market entry strategy for home office, home business, small business and large business alike. It allows investors to choose the right market entry vehicle, to tailor products to specific market segments.
Because now you are in this stage of business planning and preparation you nee to perform well on the track. You are building the foundation of your future career and many further successes.
Remember, you can't make money if you try to sell ice to Eskimos, or you try to create a new market। It's always better to find a hungry market and give them what they want not what you THINK they need. This is the main key to building wealth.
You can’t build a business based on estimates of future revenues and earnings. You need scientific and technical information, you need a comprehensive source you can trust. You should create a database that will address your business needs and gives you the functionality and reports you want.
It is definitely easier said than done. But don’t worry. I’ll take you step-by-step, from the beginning and teach you in plain English what you need to know and do, to make sure which small business start up idea of your selected ideas is more profitable. So, first lest start by…
Doing Market Research to Know Your Audience!
Whatever your business is, you have to know your potential audience. You have to know who your clients are, what is their problem, what they want and what makes them buy. Your task is to take the needed time and effort to put yourself in the shoes of your buyers. Otherwise you won’t get any! Knowing your customers means knowing their reasons for buying the product/service you are going to sell to adapt your product and marketing messages accordingly for maximum profits.
1 - Who Your Customers Are?
Your customers are every type of person female as well as male, every type of business on/offline that might need your product or service to solve a common problem, save time, make money, make life easier, etc…
2 - Discover Your Customers
Your first step is to go where your potential customers congregate to observe them. Go to forums or any other place where you can find your potential customers. Do not ask questions just heard, read and take notes to determine:
- Their demographic (age, income, education, gender, occupation, background, etc…)
- What newsletter they read?
- What forums they visit and post to?
- What else might do while surfing the net?
- What kind of business are they involved in?
- What questions are they asking?
- What words they use? Ect...
3 - Prepare a List Of Questions
Prepare a list of questions or concernS you want to address।
Note: Always use your potential customers words where you can। When you use their words and feel their pain they feel that you are one of them you are not a stranger and they will be likely to answer your questions and share their thoughts.
Here is a list of questions you may use to get you started। You may ask them questions to find out…
1. What product or service may meet their perceived need.
2. How they want their problem to be solved?
3. The size of the potential market for a product.
4. To Discover what people want.
5. How much people would be willing to pay.
6. What encourages them to buy.
7. Best way to launch your product on the market.
8. What kind of solution are they looking for? Ect...
4 – Analyze Your Potential Customers
Once you have decided on what questions you want ask your customers – there are two main market research methods to analyze potential customers’ needs। The direct market research and the indirect market research.
- The Direct market research method: Go straight to your potential customers and ask them the series of questions you have prepared in advance. This can be done face to face.
You can ask your friends, colleagues, your family members and others at institutions, organizations, etc... and everywhere you can find them across the country.
You can contact them by telephone or by email. This kind of research is important in three ways. It can reduce uncertainty, risks and support effective decision-making.
- The Indirect market research method: This is research can be done via Journals, Newspapers, Surveys, Government publications, forums, discussion groups or via researching a particular database, etc.... These sources are easily obtainable. This information has been collected by someone else just lying around for you to benefit from.
Remember - your target market must be large enough to support your business. And its members must have sufficient disposable income to spend on your product or services. If not, the business will not succeed and nothing else in the market feasibility study, business plan, marketing plan, business performance improvement or time management matters.
Doing Market Research to Know Your Competitors
Conducting good market research to know you potential competitors is the key determinant to make success for business and market control.
Once you have located your market and have analized your potential customers you should know your competitors. Analyze their products, websites, marketing strategies and everything you want; then use this information to improve the product or service you offer, your marketing strategies and your Web site.
Market research to know and analyze your Competitors can help identify their strengths and weakness to position your business for high repeat sales and lifetime customer loyalty.
1 - Who Are Your Competitors
You need to take the time to determine who your competitors are? You may think your competitors are only home businesses, companies and marketers selling the same products and/or services that fills the same need as yours does। Your competitors are also other marketers or companies selling other products and target the same market?
For example, if you are selling a videos game your direct competitors are every marketer selling any brand of video games। But what about other games that involve computers and internet. These are your indirect competitors and they are targeting the same market.
First Begin your market research by investigating your main competitors। These are the market leaders, the companies who currently dominate your market and you have to fight with to get your share। Next, look for your indirect competitors.
After you've figured out who your competitors are, determine their strengths and find out what their weakness are?
2 – Prepare a List Of Questions
First and as done with your potential clients prepare a list of questions and find the answers. Here is a list of questions to help you get started...
- Why do customers buy from them. Is it price? quality?, ect…
- How does your competitor treat their customers?
- What reputation your competitors have?
- Do your competitors accept credit cards?
- What equipment does your competitor use?
- What marketing strategies they are using? Is it search engine optimization? Pay Per Click (PPC) Search engines, link popularity strategy, forums postings, articles marketing, press releases, etc…
- Which search engines are bringing them traffic?
- Which Keywords do they target?
- Who is linking to your competitors websites?
- Are they paying for traffic? What strategy are they using? Pay Per Click Search engines, newsletter advertising, or what?
- How much are they paying for traffic?
- Are they using email marketing strategy?
- Do they use affiliate programs to market their products? If so, do they provide all needed tools to help their affiliates? How much they pay affiliates?
- What traditional "offline" marketing they are using? Are they using direct mail, Yellow Pages, print ads, magazines, TV advertising, etc….
3 – Analyze Your Competitors
You can’t analyze your competitors face to face as your potential customers! But you can spy them legally using the following methods:
- a- Analyze your competitors websites
Do some searches using your favorite search engine. Type in your main keyword phrase and focus on the websites that rank high on the search results। Analyze at least the ten results.
Examining your competitors web sites and their pages is an essential part of competitive analysis and the best technique for optimizing your own pages and staying on top in your marketplace. Visit their websites and find out:
- What do you like or dislike?
- Does the web site load fast, is the design attractive, boring?
- Are they using videos, audios?
- Examine the titles and content. Pay attention to the titles and descriptions. This will give you an idea of the audience they are trying to target.
- What keyword phrases are they targeting?
- Are collecting visitors' email adresses? If so, what incentive are they using?
- Evaluate your competitors websites strength, importance and visibility with this all-in-one tool SEOmoz Page Strength Indicator
- Check out their link popularity using this free link popularity checker tool
- Analyze their back link with this free Back Link Analyzer
b - Analyze your competitors products or services.
- Ask questions - Visit forums related to your business or any offline area where you can find your competitors’ customers. Post and/or ask question about your competitors products, questions about quality, customers service, functionality, the product features, and any other question you want to ask.
Analyze the answers and focus on the perceived strengths and weaknesses। Customer perception is an important factor of marketers’ relationship with their customers. Actually customer perception is more important than reality.
- Buy the product – Why not go more further and buy the product. Being your competitors customers will gives you an insight of how their customer service is, how the product really works, how they treat their customers and much more.
Put all the gathered information in a table form। Write down the names and or business names of your selected competitors. List all important details such as (price, quality, reputation, expertise, personnel, marketing, or whatever else is important for you) in separate columns.
Once you have this table set, rate your competitors, and make sure to put in comments explaining why you have given them that rating। You can color the strengths columns areas in red and weaknesses columns areas in green, so you can see at a glance where each competitor stands.
Determine Your Position In Your Market
If you have researched your market well, then you have fantastic ideas about your potential customers and competitors. You know the general wants and desires of your targets. You know also your competitors' weakness and strenghts. Using this information you can position your business for success and put yourself in front.
- See if you can narrow down the reason why their websites tओ higher
- IImplement their good ideas on your website. Go over your thoughts on the competition and take the best parts of their web sites, and try to apply them to your advantage.
- What good ideas you can use on your website. Go over your thoughts on the competition and take the best parts of their web sites, and try to apply them to your advantage.
- Determine what marketing strategies you should use to surpass your competitors.
- Decide how to design your website. Do you need a professional designer, or can you do it by yourself? It’s up to you.
- Pick the keyword phrases you need to target.
- Offer your product or service as a benefit to the customer.
- Decide how to price your product or service. This step is one is the most difficult steps a home business owner may face. So, be careful and pay great attention.
Getting information about your competitors can give you the leading edge, as it can show you ways in which your home business can be unique and can benefit the customer.
As your business develops, market research needs to be an ongoing part of your business। You should always be gathering information about your competitors. Visit and examine their Web sites. Read their newsletters. Use their products. See how they treat their customers. Make surveys to see how your customers feel about competitive products or services., etc…
Now you have all what you need to do to perform market research. Go through your business ideas one by one and find out which idea has potential for success.